AMA - Former lawyer working in an opportunistic credit investment seat Forum

[Anonymous User]

Used to post here a bit and used TLS for admissions so doing an AMA for a bit of a give back.

I spent some time as a lawyer and in-house, ultimately moving over to an investment manager looking at investments in opportunistic credit, special situations, structured equity, etc. Very happy about the move however currently do make less than class year peers in biglaw. I am relatively junior, at the step after 2 year banking and 2 year pre-MBA stint. K-JD from a T25 school. I'm one of three people from my class in investment seats right now.

Biglaw is better for:
- Total compensation. I believe my current class year will make 385k or so all cash. I hopefully catch up and clear next year or year after taking into account expected carry received but then start competing with partner level soon after. Top guys at my firm blow biglaw out of the water, but the clearing point is probably around year 10-12 out of law school for me.

Current seat is better for:
- Interesting job. Like content a ton more. Could actually see doing this for a while.
- Exit opportunities. I get pinged for a vast variety of exits, HFs, PE, corporate development, corporate strategy, startups (fintech focused), etc.
- Lifestyle. Total hours don't deviate too much but I can generally run 8AM - 7PM work blocks during M-Th and go into phone mode on nights and weekends if things are blowing up. On multiple deals weekday timing can go til midnight but thats more self depreciating choices on my end.

Happy to discuss any questions. Can discuss non-law recruiting as well.

[soft blue]

Thanks for posting, appreciate it.

1.) Literally, what is your job? Do you just read the docs, explain covenants and bankruptcy, etc? Do you do credit analysis itself?

2.) How much finance knowledge, if any, did you bring to this job? How did you get it? How much do you have now relative to your peers at the shop?

3.) How did you get the job, in broad strokes?

4.) What was your law firm background? RX? Credit? Something else?

5.) What opportunistic stuff is ... left? Distressed managers have been complaining forever and saying the only "real" distressed opps aren't at size anymore (i.e. $100mm or less investments).

[Anonymous User]

Thanks for posting, appreciate it.

1.) Literally, what is your job? Do you just read the docs, explain covenants and bankruptcy, etc? Do you do credit analysis itself?

2.) How much finance knowledge, if any, did you bring to this job? How did you get it? How much do you have now relative to your peers at the shop?

3.) How did you get the job, in broad strokes?

4.) What was your law firm background? RX? Credit? Something else?

5.) What opportunistic stuff is ... left? Distressed managers have been complaining forever and saying the only "real" distressed opps aren't at size anymore (i.e. $100mm or less investments).

1) Pure generalist investment seat so do business underwriting primarily. A large portion of my job is structured equity so much closer to PE style diligence and governance in these cases. A ton of benefits of course knowing legal sides of the credit agreements, but most people can get there with covreview / Reorg / Xtract. Any questions I have on language I am running by external counsel anyways.

2) Had some, had done a level of CFA and took a few MBA finance courses in law school. I'm at around par for my level on this skillset. Main hole for me is sourcing, I don't have that massive network of others at funds that others seem to have.

3) I was already at the firm when they expanded the team and networked my way in from a legal seat. I came in a the level one year after the IBD analysts joined.

4) Corporate and credit.

5) I don't really invest in pureplay secondary distressed buys at all. There aren't enough opportunities for us to play in and we aren't really set up to do it well. On the stressed / distressed side I often invest in stressed situations that are heading towards distressed land or that have refinancing issues and act as a rescue capital provider through a mix of debt / preferred / equity targeting 13-17% gross unlevered returns. Basically providing very expensive junior paper to enable a refinance, etc. The mandate is pretty wide however and we will also provide preferred equity to growth companies, 363 sales, exit financings, some infra and real estate (though none closed).

[Anonymous User]

Thanks for doing this.

Looks like you said that you came over to a fund in a legal role, out of BigLaw, then pivoted into the investing role - how was that process? Was this always your plan, or was it somewhat serendipitous?

You also mentioned that there are a few people from your class in investing roles - any idea how they made that work?

[Anonymous User]

Thanks for doing this.

Looks like you said that you came over to a fund in a legal role, out of BigLaw, then pivoted into the investing role - how was that process? Was this always your plan, or was it somewhat serendipitous?

You also mentioned that there are a few people from your class in investing roles - any idea how they made that work?

Generally the plan was to make it to an investment seat eventually but I was expecting the move closer to 5-6 years out of school rather than 2 years. Moving was relatively straightforward, I went through the normal interview processes after getting into the process from networking. Standard LBO test, case study with pitch, etc.

Both of the people went directly into investing seats from law school after interning at the respective firms when they were in their law school class. One VC and one PE, both MM type funds. I went to school in a metro-area without a super strong MBA programs (think Atlanta, Minneapolis, etc.) so my school was de-facto the best program in the area, so internships were relatively easy to obtain compared to say NYC, Chicago, or Bay Area.

For example a Columbia law school student may struggle getting a NYC investment internship, just because of the competition from MBAs in the area.

[TJDMB]

Thanks so much for doing this. Heading to biglaw next year as a first year but trying to figure out either an IB or, preferably but less likely, a buyside exit within 2-3 years.

In terms of recruiting, how do you think about relative importance of law school vs first firm? When LinkedIn doomscrolling, hard to ignore the disproportionate number of HYS grads who've been able to make the transition. Would also love to hear a bit more about how your PE and VC friends got the jobs, and what sectors they're focused on, if you're able to share details there.

[Anonymous User]

Thanks so much for doing this. Heading to biglaw next year as a first year but trying to figure out either an IB or, preferably but less likely, a buyside exit within 2-3 years.

In terms of recruiting, how do you think about relative importance of law school vs first firm? When LinkedIn doomscrolling, hard to ignore the disproportionate number of HYS grads who've been able to make the transition. Would also love to hear a bit more about how your PE and VC friends got the jobs, and what sectors they're focused on, if you're able to share details there.

I'm of the view its firm > law school to a certain point. For example a Schulte / HLS combo might do worse than a Cravath / Fordham combo, however a Skadden / HLS combo might do the same / better. Its still all about branding and network. The number of people looking to make the IBD jump and actually are prepared to interview / do the job well is pretty slim in my view, except for restructuring lawyers. Most V10 corporate lawyers can get IBD Associate interviews pretty easily especially with how aggressive the fight for juniors is right now.

My PE and VC friends, both went straight into buyside from law school. We went to school in a smaller city, so they stepped into seats that had a bit less rigid hiring processes. One lateralled (in VC) and the other is crushing it in his current seat.

[Inhousefuture]

Thanks for doing this.

Looks like you said that you came over to a fund in a legal role, out of BigLaw, then pivoted into the investing role - how was that process? Was this always your plan, or was it somewhat serendipitous?

You also mentioned that there are a few people from your class in investing roles - any idea how they made that work?

Generally the plan was to make it to an investment seat eventually but I was expecting the move closer to 5-6 years out of school rather than 2 years. Moving was relatively straightforward, I went through the normal interview processes after getting into the process from networking. Standard LBO test, case study with pitch, etc.

Both of the people went directly into investing seats from law school after interning at the respective firms when they were in their law school class. One VC and one PE, both MM type funds. I went to school in a metro-area without a super strong MBA programs (think Atlanta, Minneapolis, etc.) so my school was de-facto the best program in the area, so internships were relatively easy to obtain compared to say NYC, Chicago, or Bay Area.

For example a Columbia law school student may struggle getting a NYC investment internship, just because of the competition from MBAs in the area.

What made you decide to go to Law school for the purpose of eventually being a career investor rather than attorney? What types of people attempt to use law as a stepping stone to non-legal fields and what type succeed?
Thanks

[BrainsyK]

OP, could you please PM me? Thanks.

[Anonymous User]

Thanks for doing this.

Looks like you said that you came over to a fund in a legal role, out of BigLaw, then pivoted into the investing role - how was that process? Was this always your plan, or was it somewhat serendipitous?

You also mentioned that there are a few people from your class in investing roles - any idea how they made that work?

Generally the plan was to make it to an investment seat eventually but I was expecting the move closer to 5-6 years out of school rather than 2 years. Moving was relatively straightforward, I went through the normal interview processes after getting into the process from networking. Standard LBO test, case study with pitch, etc.

Both of the people went directly into investing seats from law school after interning at the respective firms when they were in their law school class. One VC and one PE, both MM type funds. I went to school in a metro-area without a super strong MBA programs (think Atlanta, Minneapolis, etc.) so my school was de-facto the best program in the area, so internships were relatively easy to obtain compared to say NYC, Chicago, or Bay Area.

For example a Columbia law school student may struggle getting a NYC investment internship, just because of the competition from MBAs in the area.

What made you decide to go to Law school for the purpose of eventually being a career investor rather than attorney? What types of people attempt to use law as a stepping stone to non-legal fields and what type succeed?
Thanks

I was a super splitter that was K-JD and decided to make a bet on myself on my decision to go to law school. I wasn't set on investing (was actually very interested in consulting) but knew I didn't want to be a lawyer.

Honestly people who go to law school to do something else, only really succeed if they are focused on that goal and don't do 50-50 legal / whatever else they want to do cause they just do both poorly. For example I worked through 1L, didn't do a legal internship 1L summer, didn't do write on or moot court. If I had spent time worrying about some of those things, I may not have landed my current role.

[Inhousefuture]

Thanks for doing this.

Looks like you said that you came over to a fund in a legal role, out of BigLaw, then pivoted into the investing role - how was that process? Was this always your plan, or was it somewhat serendipitous?

You also mentioned that there are a few people from your class in investing roles - any idea how they made that work?

Generally the plan was to make it to an investment seat eventually but I was expecting the move closer to 5-6 years out of school rather than 2 years. Moving was relatively straightforward, I went through the normal interview processes after getting into the process from networking. Standard LBO test, case study with pitch, etc.

Both of the people went directly into investing seats from law school after interning at the respective firms when they were in their law school class. One VC and one PE, both MM type funds. I went to school in a metro-area without a super strong MBA programs (think Atlanta, Minneapolis, etc.) so my school was de-facto the best program in the area, so internships were relatively easy to obtain compared to say NYC, Chicago, or Bay Area.

For example a Columbia law school student may struggle getting a NYC investment internship, just because of the competition from MBAs in the area.

What made you decide to go to Law school for the purpose of eventually being a career investor rather than attorney? What types of people attempt to use law as a stepping stone to non-legal fields and what type succeed?
Thanks

I was a super splitter that was K-JD and decided to make a bet on myself on my decision to go to law school. I wasn't set on investing (was actually very interested in consulting) but knew I didn't want to be a lawyer.

Honestly people who go to law school to do something else, only really succeed if they are focused on that goal and don't do 50-50 legal / whatever else they want to do cause they just do both poorly. For example I worked through 1L, didn't do a legal internship 1L summer, didn't do write on or moot court. If I had spent time worrying about some of those things, I may not have landed my current role.

PM me, if you can. I would like to ask you some questions about my specific situation.

Thanks